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27 April 2018
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FM SERVICE EXPERTS: ‘CELEBRATE GOOD FM PROCUREMENT TO GET MORE OF IT’

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The panel discusses the value proposition

10 April 2018 | Martin Read


The need to celebrate best practice in the procurement of facilities management services has been debated today by panellists at the Facilities Event in Birmingham.

 

Charlie Sinton, managing director of Pareto FM, spoke of seeing shifting mindsets amongst clients, with some now ‘brutal’ in how they now appreciate the vital importance of the workplace, and thus good FM services in support of it, to attracting fresh talent to their organisations.

 

Sinton spoke of seeing “a more diverse change process then we have seen in 20 years”.

 

Nigel Dews, managing director of Harrow Green, described ‘commoditisation’ as “a horrible word”.

 

“In the context of rationalization, we understand that price is always important. But the problem we are finding increasingly is that there is a disconnect between procurement and the service’s end users. Procurement teams tend to mark and score tender responses, but unfortunately they are not the end users. It’s unfortunate that what the customer is thinking they are going to get isn’t what ends up being delivered.

 

“Customers still want their suppliers to have all the environmental accreditations, to pay the living wage, take on apprentices, connect to our welfare policies – but what disappoints when looking at bid scoring criteria is how low down these elements are on the priority list. How do you value ‘value’? There’s a lack of understanding in certain organisations.”

 

There needs to be a mindset shift in procurement about what value is, and that is the challenge, said Dews.

 

Greg Davies, director of market development for Assurity Consulting, spoke about the impact of cost-first procurement processes, in particular in the area of compliance. Quoting an HSE intervention programme on legionella, Davies said that 54 per cent of material breaches “were due to risk assessments not being up to date”.

 

Martin Pickard of the FM Guru consultancy was keen to point out the difference between good and bad FM procurement. He commented that it can be too easy to stereotype procurement as a “blunt force that goes out and buys things cheap”.

 

But just like the FM service itself, there is good and bad practice.

 

“Clearly there are organisations driven by the revenue piece, but they are only buying what people are selling; certain clients, procurement teams and some service providers have colluded in that race to the bottom. What we are missing in the current procurement process in many parts of the economy is that conversation about what constitutes value. And customers have got to do their part.”

 

 “The issue in getting a price right comes down to the client giving you sufficient information. Unpopulated asset registers and no records of previous maintenance mean service providers are forced to guess.

 

“So, as a result, you will add in risk provision. If you’re a client and you want the best price, you must provide as much information as possible. Detail, detail, detail,” he added.

 

The Facilities Event continues this afternoon, tomorrow and Thursday at the NEC in Birmingham.